Kochi: Disruption in tea production and trading in Kenya and some other tea producing countries in the region in the wake of the post-election violence in Kenya from December 30 is likely to push up the Indian tea exports.
Sources at a leading tea producing and exporting firm told Business Line that buyers from Egypt and Pakistan had turned towards India following disruption in supply from Kenya, the leading African producer of tea. “Increased activities are taking place on the apprehension that the present Kenyan situation might lead to rise in prices. It may push up exports of quality CTC teas at the prevailing prices from the country, mainly South India,” they said.
Sharp decline
In fact, there has been a sharp decline in the Indian tea exports to Pakistan. According to Upasi statistics, it has dropped substantially from 5,790 tonnes during January-June 2006 to 2,210 tonnes in the corresponding period in 2007. At the same time, shipments of Indian teas to Arab Republic of Egypt has shown an upward trend in 2007. Exports during Jan-June 2007 stood at 1,710 tonnes as against 1,080 tonnes in the same period in 2006.
Indian CTC prices have gone up by Rs 3.44 a kg now compared with that of November and December. Average auction price of CTC during January - mid-November 2007 was Rs 48.40 a kg. Industry sources attributed this increase to ending of the season in north India and the fall in output both there and South India.
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If the current situation lasted for a month then it would have a significant negative impact on the tea supply from the African major which exports mainly CTC tea, J.K. Thomas, Managing Director, Malankara Plantations Ltd and former President, Upasi said.
Tea auction has reportedly resumed in Mombasa on Monday. Inferior quality teas would be sold on Mondays and main categories on Tuesdays. Kenyan production during Jan-Oct 2007 has shown a substantial increase by 63.9 million kg (mkg) to 308.4 mkg from 244.5 mkg in the same period the previous year.
Negative impact
However, there has been disruption in plucking and processing. On the other hand, sharp rise in fuel cost is said to have forced several tea factories in the region to down its shutters. Therefore, there could be a negative impact on the supply line for some time at least, industry sources here pointed out.
Kenya is one of the leading producers of tea in the world with around 390 mkg of tea, mostly CTC. The other producers in Africa are Uganda and Tanzania, who occupy the second and third positions with 36 mkg and 30 mkg respectively a year.
Almost all the African tea producing countries such as Uganda, Tanzania, Rwanda, Burundi and Mozmbique sell their teas through Mombasa auction and hence its suspension last week had seriously affected these producers, they said.
Some of the leading buyers of African teas are Pakistan, Egypt, UK, Sudan and United Arab Emirates and they absorb an estimated 70 per cent of the tea produced by these African countries, they said.
Sources at a leading tea producing and exporting firm told Business Line that buyers from Egypt and Pakistan had turned towards India following disruption in supply from Kenya, the leading African producer of tea. “Increased activities are taking place on the apprehension that the present Kenyan situation might lead to rise in prices. It may push up exports of quality CTC teas at the prevailing prices from the country, mainly South India,” they said.
Sharp decline
In fact, there has been a sharp decline in the Indian tea exports to Pakistan. According to Upasi statistics, it has dropped substantially from 5,790 tonnes during January-June 2006 to 2,210 tonnes in the corresponding period in 2007. At the same time, shipments of Indian teas to Arab Republic of Egypt has shown an upward trend in 2007. Exports during Jan-June 2007 stood at 1,710 tonnes as against 1,080 tonnes in the same period in 2006.
Indian CTC prices have gone up by Rs 3.44 a kg now compared with that of November and December. Average auction price of CTC during January - mid-November 2007 was Rs 48.40 a kg. Industry sources attributed this increase to ending of the season in north India and the fall in output both there and South India.
• Check out our Yearender Special
If the current situation lasted for a month then it would have a significant negative impact on the tea supply from the African major which exports mainly CTC tea, J.K. Thomas, Managing Director, Malankara Plantations Ltd and former President, Upasi said.
Tea auction has reportedly resumed in Mombasa on Monday. Inferior quality teas would be sold on Mondays and main categories on Tuesdays. Kenyan production during Jan-Oct 2007 has shown a substantial increase by 63.9 million kg (mkg) to 308.4 mkg from 244.5 mkg in the same period the previous year.
Negative impact
However, there has been disruption in plucking and processing. On the other hand, sharp rise in fuel cost is said to have forced several tea factories in the region to down its shutters. Therefore, there could be a negative impact on the supply line for some time at least, industry sources here pointed out.
Kenya is one of the leading producers of tea in the world with around 390 mkg of tea, mostly CTC. The other producers in Africa are Uganda and Tanzania, who occupy the second and third positions with 36 mkg and 30 mkg respectively a year.
Almost all the African tea producing countries such as Uganda, Tanzania, Rwanda, Burundi and Mozmbique sell their teas through Mombasa auction and hence its suspension last week had seriously affected these producers, they said.
Some of the leading buyers of African teas are Pakistan, Egypt, UK, Sudan and United Arab Emirates and they absorb an estimated 70 per cent of the tea produced by these African countries, they said.
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